PAN no longer mandatory for SIP transactions in Mutual Fund

[Chawanni Advice]

From August 1, 2009 providing a copy of your PAN ( Permanent Account Number ) Card is not mandatory for investing in Mutual Funds ( MF ) if you are investing via the SIP ( Systematic Investment Plan ) route ( and do not invest more than Rs. 50,000 in a year ).

Instead of the PAN card you will have to provide another identity proof like Driving License, Voter's Id or any other government-issued id card. Complete details can be found in this guideline issued by SBI Mutual Fund.

An investment limit of Rs. 50,000 per year means a maximum of Rs. 4000/- monthly SIP ( or Rs. 12000/- quarterly SIP ) which you can invest via the Micro SIP in a rolling 12-month period or in a financial year.

So whats the catch? Although PAN card is not required for investment via Micro SIP but if you plan to do one-time transaction in the same mutual fund folio/account you would be required to supply a PAN card. This means that you cannot do one-time transactions in a Micro SIP folio.

Overall, a very positive move, as I always recommend SIP as the preferred mode of investment.

To understand SIP, read this.

The original article can be found here:
http://chawanni.blogspot.com/2009/08/pan-no-longer-mandatory-for-sip.html